Nvidia Office in France Raided by the French Competition Authority

The unannounced early morning raid involved the FCA seizing control of the Nvidia office in a bid to find evidence of unfair practices.

An Nvidia office in France was raided by the French Competition Authority (FCA), which suspects that the technology firm has been following anti-competitive practices. Reports of the raid, which took place on Tuesday, were confirmed by the FCA in a press release it published the next day.

It had been authorized by a judge who oversaw freedom and detention, the FCA stated. The raid was part of a broader investigation into the cloud computing sector, the authorities have claimed.

Why Did the FCA Raid the Nvidia Office?

The US tech giant is far ahead of AMD and Intel, its key rivals. GPUs manufactured by Nvidia are in high demand among video game console makers, bitcoin miners, and a vast array of technology companies.

Lately, the company has also witnessed a sharp spike in the demand for GPU chipsets from OpenAI and other AI companies.

With an 84% market share and a market valuation of $1 trillion, Nvidia has almost monopolized the global GPU market.

The computer systems powering powerful AI services like ChatGPT use Nvidia GPUs, and Oracle revealed that it has been pouring billions of dollars into the company's chips.

The prices of GPUs start from $1,000, but the GPUS required by AI companies usually costs $10,000 or more. Nvidia's dominance in such a profitable market has raised concerns over the potential use of unethical practices to disrupt competition.

A report on cloud rivalries published by the FCA in June accused tech giants like Microsoft, Google, and Amazon of hindering competition in the region.

An investigation into the cloud computing sector followed, with the authorities trying to ascertain the validity of the report's findings.

What's Next for Nvidia?

The raid does not necessarily indicate that Nvidia actually adopted any unfair trade practices. The FCA has also investigated other Big Tech companies in the past, including a fine issued to Google in 2021 for the infringement of the EU competition law.

As of now, the raid at Nvidia's office only appears to be a part of the broader investigation rather than an investigation specifically targeting the US giant.

At this stage, this intervention obviously does not prejudge the guilt of the company concerned by the alleged practices, which only an investigation into the merits will, if necessary, make it possible to establish.FCA report

However, it might not be a coincidence that the Nvidia office was raided very soon after French telecom operator Iliad Group and cloud provider OVHcloud announced the large-scale deployments of Nvidia GPUs.

The EU is currently gathering information on the GPU market to determine if there's any need for corrective action.

Illiad purchased a DGX SuperPOD that comprises 1,016 Nvidia GPUs, while OVHcloud launched cloud instances running on Nvidia's A100, H100, L4, and L40S accelerators.

Italy's Leonardo system, which holds the 4th place among the top 500 publicly known supercomputers, was built by French supercomputing vendor Atos using both Intel Xeons and Nvidia A100 GPUs.

Whether or not Nvidia is likely to face any legal action depends on the findings of the raid, as well as future investigations.

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